Prime Minister Malcolm Turnbull has admitted WA's share of GST wouldn't pass the "pub test" but then slammed a West Australian federal Labor MPs' submission into an inquiry into it as "complete and utter waffle".
The Turnbull government has asked the Productivity Commission to look into how the GST is distributed to states and territories.
WA currently gets just over 34 cents in the dollar after the Commonwealth Grants Commission released its annual distribution figures in March and lifted WA's share from an all-time low of 30 cents.
Mr Turnbull said WA's share of the GST wasn't fair, but said West Australians should be angry with federal Labor MP's for not pushing for a bigger slice in their submission to the Productivity Commission.
In their submission, WA Labor backbenchers Tim Hammond, Josh Wilson, Anne Aly, Madeleine King and Senators Louise Pratt, Patrick Dodson, Sue Lines and Glenn Sterle, didn't make any recommendations to increase WA's share of the GST from 34 cents in the dollar.
"It is just pages of waffle, they are not even prepared to go as far as I have proposed last year," he told Radio 6PR on Wednesday morning.
"I recognise Western Australians are furious about this...I understand that and what I have done has proposed one way of dealing with it.
"What we need to and I encourage you to do this, is to put the acid onto the Labor party and say to them when are you going to stop simply taking pot shots at the Liberals and present a solution of your own or support us?
"This is a political challenge... what would be fantastic would be if the heroic Labor members and Senators from Western Australia who are so lacking in commitment to your state, they are not even prepared to go as far as I proposed last year.
"The way in which the formula works in Western Australia isn't fair, it doesn't pass the pub test - use any metaphor you like - you are not getting a fair go and I recognise that."
Mr Turnbull also defended his comments at a Liberal state conference in August last year when claimed he was committed to fixing the GST system and even hinted WA's share would recover to between 70¢ and 75¢ by 2019-20.
"Let's be very clear and what I said was an approach that I had worked up with Colin Barnett and my federal colleagues and my aim was to wait until the GST formula adjusted," he said.
"And I think at that time the WA Treasurer was forecasting it would get to in the order of 70 or 75 cents by 2019.
"So what I said was we should aim to set a floor point below that no state would be worse off at the time."
"I understand they are not fair to Western Australia. I am the first Prime Minister to actually acknowledge there is a problem here and I am the first Prime Minister to offer to do something about it."
The Prime Minister also laughed off suggestions he was avoiding WA having only visited the state once in almost a year or
He also rejected claims Western Australian Federal Liberal MP's would be at risk of getting booted out at the next election because of the red hot anger of GST.
"I've spent a lot of time in Western Australia and I will be there again for the best part of a week very shortly," he said.
"Western Australia is very much part of my life...many years ago Lucy and I started a company in Western Australia which was the Western Australia Software Exporter of the Year winner, so I have a long history with WA and a long connection, so I can assure you I'm not a stranger there."
WA Premier Mark McGowan said it was in the Prime Minister's hands to "fix the broken GST system".
"Western Australians are well aware that Malcolm Turnbull could fix the GST system today, if he wanted to. It is up to the Prime Minister to fix the formula," he said.
"We have an opportunity here to finally reform the broken GST system.
"The current GST system doesn't encourage job creation, and it doesn't encourage economic growth. The current system is holding the nation back.
"In fact, the current system actually discourages mining states from developing new projects. There has to be a better way.
"WA has been ripped off for too long. The system is broken, it's time for positive reform that delivers WA a fair share."
Mr Hammond also fired back at the Prime Minister, labelling his comments as "sad".
"It really articulates why we are entitled to feel so disappointed with this Prime Minister," he told Radio 6PR shortly after Mr Turnbull had been on.
"He's so focused on the other side, he forgets he's the one in the top job at the moment, with the capacity to fix this right now and he's failing to do so."
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